[ad_1]
JPMorgan CEO Jamie Dimon has warned investors that the Federal Reserve may have to adopt sweeping policy next year, despite its best efforts to allay concerns about inflation and interest rates.
It comes as Federal Reserve Chairman Jerome Powell has previously suggested that the central bank could start undoing pandemic-era monetary stimulus before the end of this year.
He is expected to give more details later Wednesday at the end of the Fed’s two-day policy meeting. The US central bank is also expected to publish its expectations for inflation and expected interest rates.
Speaking to CNBC, Dimon said if inflation rates in the United States continued to rise over the next few months, the central bank may need to act quickly, according to what Al Arabiya.net saw.
And if inflation is so high that it forces the central bank to “lock the brakes, withdraw liquidity, you will see a massive response,” Dimon added. “I don’t expect that, but there is a possibility that they will do it next year,” he said.
It is likely that the Federal Reserve will react rather than take preventative measures.
The biggest uncertainty for the Fed has been the trajectory of inflation. The latest data showed that consumer prices in the United States rose 5.3% a year through August, down slightly from a 13-year high of 5.4% in July.
Powell argued that this price increase is temporary. But Dimon said if those high inflation figures continue into December, U.S. policymakers may need to recognize that at least some of the price increases are here to stay.
“Fears will be brought under control if global growth remains healthy, even with rising inflation,” he said.
He added: “The current inflation is double, one is temporary and the other will continue for a long time – it is not a disaster.”
Source link
